Articles Posted inFalse Claims act

The software development company Informatica LLC f/k/an Informatica Corporation will pay $21.57 million to settle a case charging that it caused the government to be overcharged by providing false information about its commercial sales practices that was used in General Services Administration (“GSA”) contract negotiation. Informatica is a software development company, headquartered in Redwood City, California that sells tools for establishing and maintaining data warehouses.

The case alleged Informatica allegedly knowingly provided false information concerning its commercial discounting practices for its products and services to resellers, who then used that false information in negotiations with GSA for government-wide contracts called “Multiple Award Schedule contracts.” Under these contracts, GSA uses commercial pricing disclosures to negotiate the maximum prices that a vendor can charge government agencies. Here, Informatica’s allegedly false disclosures caused GSA to agree to less favorable pricing, and, ultimately, government purchasers to be overcharged. The settlement also resolves allegations that Informatica caused sales to the United States in violation of the Trade Agreement’s Act, which restricts the country of origin for goods purchased by the government.

“Companies seeking to participate directly or indirectly in government contracts must adhere to applicable rules designed to promote the United States’ objective of prudently expending taxpayer funds by negotiating fair and reasonable pricing for the goods and services it purchases,” said U.S. Attorney for the District of Columbia Jessie K. Liu. “We will pursue recoveries from those that fail to live up to these obligations.”

An investigation by the U.S. Space Agency found that a metals manufacturer had provided hardware to Nasa backed by fraudulent test results. These materials eventually resulted in a loss of over $700 million, as well as multiple failed satellite launches. The company involved in the fraudulent materials scheme was an Oregon based company called Sapa Profiles Inc., which according to the investigation has falsified thousands of parts certifications throughout its nearly 20 years in business.

According to NASA, the faulty parts were used to surround a rocket named the Taurus XL, which was designed to deliver years of satellite research regarding the Earth’s climate. However, with the uncertified parts installed, the rocket was not able to break out of its encasement properly during launch. This effectively destroyed the project and resulted in several years of work and funding put to waste.

Full coverage of Medicare Part A benefits is said to be at risk within seven years as funding begins to run out. This could potentially lead to long-term effects that will be devastating to a large number of nursing homes and those who operate them, as well as the healthcare system as a whole.

Generally, Medicare Part A is responsible for covering inpatient care in a hospital, skilled nursing facility care, hospice care, and through home health care programs. Medicare is based on the laws set by the state and federal government, and it is up to national and local decision-makers to set the coverage standards.

The Hospital Insurance (HI) Trust Fund directly supports Medicare Part A benefits, which include skilled nursing services and facilities. This fund will only have the means to help provide these benefits up until 2026, according to the findings of the Medicare Board of Trustees. These are the same findings recorded last year and display a serious potential for a decline in spending on skilled nurses.

According to an investigative report in the Wall Street Journal, the heavy tariffs imposed on Chinese goods has resulted in a large increase in tariff evasion schemes by Chinese companies seeking to sell their goods here. Customs officials, importers and shipping brokers say that the tariff increases are being countered by unscrupulous Chinese manufacturers who are fraudulently shipping products here under false manufacturers codes and through trans-shipping and falsifying the actual country of origin, according to the Wall Street Journal. The result is that the tariffs are failing to protect. The tariff evasion using fraudulent product codes relates to 10-digit designation called an HTS code, of which there are 18,927. These codes are required to identify products and varieties. Unscrupulous manufacturers seeking to evade our tariffs send the products in with codes which designate products which are not on the tariff list.https://www.wsj.com/articles/the-u-s-china-trade-battle-spawns-a-new-era-of-tariff-dodges-1539009200?mod=hp_lead_pos5

One indicator of the misclassification increase is that there were 146 rulings in July, nearly triple the number six months earlier and this is considered the tip of the iceberg. In one example included in the WSJ article, a wood importer in Oregon received a call from a supplier asking if he would like some Chinese plywood tariff free. The importer asked how this would happen and the response was don’t worry about it as the plywood would not contain any Chinese markings and it would be shipped under some other code.

Diamond saw blades made in China now carry 82% tariffs. In July, two California importers controlled by a Chinese manufacturer tried to dodge the tariff by coding diamond saw blades as grindstonesaccording to Customs. The maker, Danyang Like Tools Manufacturing Co., claimed independent of the California importers but one of them told the agency Danyang was its owner. The California firms have disputed the charges.

The founder and former president of Second Chance Body Armor, Richard Davis, has agreed to settle with the government after a sale of defective bullet proof vests that lead to life-threatening situations. The vests were purchased for federal, state, local and tribal law enforcement agencies. Under the False Claims Act, Davis will have to relinquish over a million dollars in assets.

The Bullet Proof Vests

Second Chance sold body armor to government agencies and then was reimbursed by the Department of Justice Bulletproof Vest Partnership (BVP) program. The DOJ alleged that Second Chance’s vests were defective when exposed to heat and humidity. They basically lose the ability to stop ballistic fire. The Department of Justice also claims that Davis knew about the faulty nature of the vests.

Kmart Corporation, a wholly owned subsidiary of Sears Holdings Corporation (SHC), has agreed to pay $32.3 million to the United States to settle allegations that in-store pharmacies in Kmart stores failed to report discounted prescription drug prices to Medicare Part D, Medicaid, and TRICARE.

The False Claims Act lawsuit, which was filed in 2008 by James Garbe, alleged that Kmart pharmacies offered discounted generic drug prices to cash-paying customers through various club programs but knowingly failed to disclose those prices when reporting to federal health programs its usual and customary prices, which are typically used by those programs to establish reimbursement rates.

“Pharmacies that are not fully transparent about drug pricing can cause federal health programs to overpay for prescription drugs.” said Acting Assistant Attorney General Chad A. Readler for the Department’s Civil Division. “This settlement should put pharmacies on notice that there will be consequences if they attempt to improperly increase payments from taxpayer-funded health programs by masking the true prices that they charge the general public for the same drugs.”

The settlement resolves allegations brought by several whistleblowers that Hospice Plus, Phoenix Hospice, and Goodwin Hospice submitted claims to Medicare and Texas Medicaid that were rendered false as a result of the payment of kickbacks by the hospices, its owners and employees, and others. There were two alleged schemes. First, from 2007 through 2012, kickbacks were allegedly paid to American Physician Housecalls, a physician housecall company, in exchange for patient referrals to these hospice companies. They took the form of sham loans, a free equity interest in another entity, stock dividends, and free rental space. Second, from 2007 through 2014, kickbacks were allegedly paid to medical providers, including doctors and nurses as well as hospitals and long-term care facilities, in exchange for patient referrals to these hospice companies. The alleged kickbacks took the form of cash, gift cards, and other valuable items.

In addition to reaching a settlement with these defendants, the United States also requested that the Court permit the United States to intervene in and prosecute the fraud claims against two former executives, Dr. Bryan White and Suresh Kumar.

The Sunday Times has reported that Lance Armstrong and his management company Tailwind Sports Corporation have settled their legal battle with the SCA Promotions company, apparently paying more than $10 million to the company that agreed an insurance policy covering the cost of bonus payments for Armstrong’s Tour de France victories.

Still pending is the False Claims Act being pursued by the Justice Department seeking to recover the $30 million the US Postal Service paid to sponsor the team. The whistleblower Floyd Landis could receive as much as 30% of any award as part of a qui tam Whistleblower legal suit. The legal battle result in Armstrong being forced to pay three times the sponsorship figure if he loses the case, up to $90 million.

Jeffrey Newman represents whistleblowers. He is not involved in this case.

A new scheme has entered the pharmaceutical industry involving what the courts have now deemed as illegal payoffs in which drug-makers holding patents, sue generic manufacturers then settle the case paying millions to keep them from making the less expensive version.

Pharmaceutical manufacturer Cephalon was sanctioned by the Federal Trade Commission for the so called “reverse payment” settlements the company struck with competing drug makers to stop them from making generic versions of the narcolepsy drug Provigil.

The problem with companies doing this, says the FTC is that it harms consumers through delayed entry of generic drugs into the market, which are far less expensive. In some cases where the drugs were ultimately billed to Medicare, Pharma companies, including Cephalon have been charged with fraud under The False Claims Act. This is because when the generic drug is kept from the market, Medicare, which is your tax dollar, pays a much higher price for the medications. There is a False Claims Act case against Cephalon that is pending at this time.

Commerzbank AG has agreed to pay $1.45 billion to settle sanctions actions for doing business with Iran, Sudan and its failure to have adequate money laundering controls, the DOJ and New York financial regulator said Thursday.

The bank “concealed hundreds of millions of dollars in transactions prohibited by U.S. sanctions laws on behalf of Iranian and Sudanese businesses, the prosecution agreement states. At one point, the bank was concerned that transactions with Iran would be revealed, so in 2003, it created a policy entitled “Routing Instructions Iranian banks for USD payments”. The policy instructed employees to “under no circumstances mention the Iranian background in the cover order.” By concealing these payment details prevented the U.S. from identifying or stopping the transactions that involved sanctioned entities.

In 1995, President Clinton issued an Executive Order finding that the actions and policies of the Government of Iran constituted an unusual and extraordinary threat to the national security of the U.S. and imposed comprehensive trade and financial sanctions on the country. In 1997 President Clinton imposed a trade embargo on Sudan which prohibited virtually all trade and investment activities between the U.S. and Sudan.